How to stay away from optimism bias

Optimism bias can be a good thing at times. You will tend to make more irrational and riskier decisions, because you will feel good about your chances for the outcome turning out in your favor. How can that be bad?

It can be bad when you are always running on optimism bias. Because, we know that life has it’s ups and downs. Not every decision we make is going to turn out in our favor. And if we continue to make decisions only thinking of the positive outcome, then we will inevitably begin to feel the wrath of those outcomes not in our favor.

There is a way to trigger optimism bias in most people. That’s with low sleep.

As soon as I heard that, I began thinking of those big time entrepreneurs who have taken incredible risks to get to where they are currently at. Then, I started to think about how most of them have admitted to sleeping very little in order to work longer hours. Think, Elon Musk, Bill Gates, Arianna Huffington, Steve Jobs and Gary Vaynerchuk. The list is a lot longer than that.

So how much of their risky decision making is based off of their unique skills, and gut feelings? How much is simply due to the fact that they were running on low sleep (optimism bias)?

It’s a mind boggling idea to me.

Where does skill and talent come into play? Where do brain malfunctions (that’s essentially what it is) come into play?

A lot of the big name entrepreneurs are recommending, the younger crowd, to value sleep much much higher, but that’s not what they did to reach their own successes. And, apparently, low sleep could have been a major contributing part of their successes.

What do we make of this? It’s hard to say, but at least we can be aware of the entire situation and try to make the best decision possible. You can watch a TED talk on optimism bias here.

2 thoughts on “How to stay away from optimism bias

  1. Rohan

    I think you may be mixing causality and correlation in success and lack of sleep.

    There are likely 2 causes of these folk being immensely successful.
    1. Getting obsessed about an idea whose timing ended up being perfect
    2. Being incredibly lucky along the way

    When 1 happens, you are willing to forgo plenty to make sure all work out. These are things you can’t not do (just ask any new parent and they’ll tell you the same).

    Most other things are just correlated. It is natural to be optimistic when you are attempting to bring a new idea into the world (again, just ask new parents :)).

    1. Arthur Post author

      Hey Rohan!

      I got the idea from Dr. Stephan Guyenet (Ph.D. in neuroscience from the University of Washington). In this interview he states that low sleep results in optimism bias. That exact part starts at 47mins 50secs.

      He talks about a gambling study where participants were more willing to make riskier moves when they were running low on sleep. They cared more about the winnings than they cared about losing.

      I do agree with your two reasons too. There are probably many other factors, but I do think optimism bias (lack of sleep) can be one of them. Finding out about the connection between low sleep and optimism bias is definitely interesting 🙂 .

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